When you're importing new contacts to Outlook, it should give you an option on what you want to do with duplicates (merge them/delete the duplicated entry/etc). Beyond that, there's been a few threads about this lately that may or may not have answered your question; search for them anyways, I believe at least one or two tools have been mentioned.
And no...Outlook isn't one of "the greatest security holes known to man"...users are
~Ladi